Vertex is poised for a shopping spree. But it’s still unclear just what might go into their basket — and at least one analyst is getting impatient
After setting the tone at JP Morgan for a busy year of dealmaking, Reshma Kewalramani and her Vertex crew are giving slightly more shape to the pipeline they want to build with $6.7 billion in cash — but leaving much to be speculated.
Through it all, the freshman CEO says, Vertex will remain “a company that is about specialty markets” — and emphatically not a rare disease player.
Geoff Porges at SVB Leerink, though, sees the drive to introduce new drugs to the pipeline more driven by necessity than anything else. The company, according to him, is avoiding key questions while exposing “inconsistencies between their portfolio and their strategy.”
“(T)he company’s success is catching up with them, in terms of the burden of having to diversify their business and add to their pipeline,” he wrote in a note. “Notwithstanding the company’s catchphrases of ‘cracking the biology’ and ‘pouring on the chemistry’, their most advanced program is CTX-001 which is an allogeneic stem therapy treatment for sickle cell disease and beta thalassemia. Another of their handful of clinical programs is their pancreatic islet cell transplant therapy for type I diabetes (entering clinic 1H 21).”
Rather than specifics, she offered some “color and texture” behind capital allocation: Compared to three years ago, Vertex molecules are in patients across six disease areas (up from just two, cystic fibrosis and pain) and revenue has grown from a little north of $2 billion to more than $6 billion.
As she suggested at JPM, it all backs up a search for mid-to late-stage assets alongside new tools:
I want to be very clear that the strategy is exactly the same what I outlined previously. And if I just focus in on the assets that fit our R&D strategy, we are now able to look at, for example, Phase 2 assets, assets that might be in Phase 3, and those are assets that we’re going to look at. We’re also going to continue to look at tools for our toolkit. I’m not looking at — I have no preconceived notions about the timing of a transaction and I have no preconceived notions about the dollar amount of a transaction. It has to fit our R&D strategy. It has to be transformative. We have to be able to add value. And, when we find that asset, and we have the patience and the judgment to be very thoughtful about that, we’re going to be ready to evaluate.
The execs also dodged a question on whether there is any platform tech that they don’t already have but would be interested in.
They have already dipped their toes into some of the hottest pools, including gene therapy, gene editing, mRNA, protein degradation and small molecule approaches for drugging RNA. “And you will continue to see us do deals and partnerships where there’s a particular technology that opens up a target that we think has transformational potential, and we’ll continue to do those as time goes on,” was as far as R&D chief David Altshuler was willing to go.
For now, at least.